JPMorgan's brawl with Greek tycoon races toward a climax

Nick Paleologos/Bloomberg

JPMorgan Chase has filed fresh lawsuits totaling about $943 million stemming from its investment in Viva Wallet, the latest legal salvo in a long-running dispute between the bank and Greek technology mogul Haris Karonis.

The bank contends Viva's managers deprived JPMorgan of the value of its investment. This is significant because the agreement with Karonis allows JPMorgan to take full control of Viva in June if the fintech's valuation is below 5 billion euros, or about $5.3 billion.

The new suit named Karonis, who is the CEO of Viva, and other executives. In a related case, the bank sued Werealize.com, Karonis' company, which owns 51% of Viva Wallet. JPMorgan owns the rest.

"We are disappointed that since the firm's investment in 2022, WRL has repeatedly and persistently sought to undermine JPM's rights by breaching the agreement that formed the basis of the firm's investment. These actions harm not only Viva but also Greece's attractiveness for future significant investments. We now look to the courts to enforce the contract terms agreed upon between us," a JPMorgan spokesperson said in an email.

Karonis countered JPMorgan's complaint.

"[The JPM lawsuits] are simply the latest step in JPM's concerted effort to depreciate Viva's value, preclude it from expanding in the United States and elsewhere in competition with JPM, and ensure that Viva's directors do not feel free or able to take steps that are in Viva's best interests but with which JPM disagrees," Karonis said in an email.

JPMorgan in 2022 first invested in Viva Wallet, an Athens-based company that sells bill pay, virtual payment cards and merchant credit in about two dozen European countries. The investment was designed to boost the bank's merchant services business in the region by addressing processing challenges within the European Union. Despite sharing a common currency, payment acceptance varies in different European countries, creating a fragmented market for merchant acquiring.

The partnership created an additional opportunity for JPMorgan to improve its ability to offer short-term credit to merchants backed by future payment flows — a similar product that fintechs such as Block and PayPal offer in the U.S., Europe and other regions to compete with established banks such as JPMorgan. Viva's range of payments and financial services includes banking licenses Viva acquired in 2020 from Praxia Bank, a Greek financial institution, enhancing Viva's ability to offer banking products and making it an attractive partner to JPMorgan. Viva received funding to fuel its own expansion as part of the deal.

The terms of the JPMorgan/Viva investment were not disclosed at the time, but Nasdaq, Reuters and other media outlets reported JPMorgan's stake was $1.1 billion and Viva's valuation was $2 billion.

Viva's current valuation is unclear. A London judge in 2024 issued a ruling that set parameters on determining Viva's valuation and was an attempt to bring closure to the legal dispute. But with the June deadline fast approaching, the two firms are no closer to an agreement.

In earlier interviews, payment experts told American Banker the troubled relationship was a cautionary tale resulting from the complexities of bank/fintech partnerships. By courting an investment from a large U.S. bank, Viva Wallet was accepting funding from a partner that it was also competing with for merchant clients. Analysts additionally noted the valuation deadline that enables JPMorgan to take total control of Viva is unusual for bank/fintech collaborations. —John Adams

Chris Ratcliffe/Bloomberg

Latin American fintech dLocal's international ambitions get boost

The U.K. Financial Conduct Authority has granted dLocal an authorized payment institution license, enabling the Uruguay-based company to offer cross-border payments, fraud controls and other digital transaction services to users in the United Kingdom.

dLocal sells technology that links merchants to emerging markets, enabling those merchants to manage both sides of the transaction without having to forge relationships with local merchant acquirers in different countries.

The FCA nod gives dLocal the ability to reach U.K. merchants that want to tap e-commerce markets in Latin America and other emerging economies, covering more than 900 payment methods. dLocal recently named co-founder Serio Fogel as its chief strategy officer while the company seeks ways to combat cross-border payment rivals such as Tipalti, Ripple, Block and PayPal.

In addition to covering its bases by connecting merchants in different markets, dLocal is looking to reach companies and gig economy workers who want to make cross-currency payments. —John Adams

Adobe Stock

Goldman Sachs invests in Canadian B2B payment firm

With B2B payments emerging as a key issue for banks, Goldman Sachs has led a 70 million Canadian dollar (about $50 million) round in Float Financial, a Toronto-based firm that sells a range of financial products to business clients.

Goldman's investment follows an expansion program at Float that added automation to accounts payable, corporate reimbursements and analysis of corporate spending. Launched in 2021, Float offers virtual and physical payments cards denominated in both Canadian and U.S. dollars as well as high-yield accounts and fund transfers. Float has about 4,000 clients and intends to use the new capital to recruit staff.

The firm is positioning itself as a rival to firms such as Brex, Marqeta and Ramp. —John Adams

Luke MacGregor/Bloomberg

Chainalysis acquires Israeli fintech to address emerging threats

Blockchain analytics firm Chainalysis has acquired Alterya, a Tel Aviv-based fraud security firm, to respond to the threat that generative AI poses to financial security.

Chainalysis plans to use Alterya's assets to support fraud detection for real-time payments and provide anti-money-laundering solutions for blockchain firms, digital wallets and crypto exchanges. Alterya's clients include Binance, Coinbase, Block and financial institutions, and it monitors about $8 billion in payments per month in both crypto and traditional currency.

The growth of Gen AI makes financial fraud difficult to prevent, Chainalysis said, contending the technology helps scammers produce fake content and identities that can deceive users to authorize payments under false pretenses. That makes it harder for banks and fintechs to detect when fraudsters are monetizing through crypto and real-time payment networks, the firm said in a release. —John Adams

Bloomberg Creative Photos/Bloomberg

U.K. opens CBDC lab but no final decision on digital pound

The Bank of England plans to launch a Digital Pound Lab to experiment with technology that supports a central bank digital currency.

The Bank of England is consulting with industry and academic experts to build a model for a U.K. CBDC. That includes technology, operational issues, commercial use cases, regulatory requirements for and the rule that public and private sector stakeholders will play.

A digital pound, if approved by Parliament, would likely split management responsibilities, with the central bank operating the ledger and commercial banks supporting the CBDC's infrastructure and managing public-facing tasks and data management. Banks would also be able to sell financial services using a CBDC.

Concerns over the impact of CBDCs on traditional bank deposits have slowed progress in a number of countries with developed banking systems, including the U.S. and the U.K. —John Adams

Yuki Iwamura/Bloomberg

Block expands open banking in the U.K.

Block, which retains its original Square brand for its merchant products unit, has partnered with Salt Edge, a U.K. open banking platform, to sell data-sharing technology to local businesses.

Open banking refers to sharing data to enable consumers or businesses to access third-party services through their primary bank account. Square envisions users of Square Card in the U.K. will particularly benefit from the Salt partnership, accessing Salt's open banking compliance product to share data with banks and other providers through application programming interfaces.

This will enable businesses to access financial services and personalized insights into their consumer's payment trends.

"Square Card is a new product for us in the U.K. and an important solution for small businesses to manage cash flow, which we know is often the biggest blocker for starting and growing a business," said Samina Hussain-Letch, executive director of Square UK, in a release. —John Adams

PayPal, Latin American firm collaborate on payment orchestration

Colombian payment technology company Yuno has entered a strategic collaboration with PayPal to expand the reach of Yuno's payment orchestration platform.

Payment orchestration refers to routing a transaction to the best processing option based on factors such as expense and settlement time. By integrating with PayPal, Yuno will be adding to its network of 300 payment methods. PayPal is a major addition, covering 400 million active users and nearly 30 million merchant accounts.

"Our affiliation with Yuno integrates our entire product portfolio, including PayPal Checkout and credit and debit card payment processing to provide payment solutions for both customers and businesses," said Paolo Fuentes, head of partnerships for Hispanic Latam at PayPal, in a release, adding the collaboration will also extend the availability of PayPal's installments, which it considers a major incentive to add new consumers in Mexico. —John Adams

Luke MacGregor/Bloomberg

Revolut's Storonsky nets windfall from share sale

Nik Storonsky, the founder and CEO of London fintech Revolut, has sold about $400 million in shares in the company following an extension of a deal that offers existing investors to offload shares, according to Sky News.

The news site says it's one of the largest sales by a European technology founder. Revolut has made dozens of moves over the several years as it builds a financial superapp through a series of consumer and merchant-focused services that it has added over the past three years.

The firm's recent rollouts include Revolut Shops, which enables consumers to buy from a network of thousands of brands and receive cash back incentives. Another product, Revolut Pay, provides a single-click option at checkout for e-commerce sellers, providing an additional option alongside Apple Pay, Google Pay and cards. —John Adams